Taking PBA to the Next Level
Taking PBA to the Next Level
Stan Livingstone, PBA Practice Area Manager,
Acquisition Solutions Inc.
Bill Neustadt, Consultant, Acquisition Solutions Inc.
Session #2, 12:35pm-1:00pm ET
NCMA’s 1st Performance-Based Service Acquisition
Community of Practice - Virtual Conference
Wednesday, March 31, 2010 12:00pm - 4:00pm ET
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Why Something New?
• The concept of PBA not new – first attempt more
than 30 years ago
• Promoted by Congress and administrations for past
two decades
• Principles behind concept – focus on performance
and results – are virtually indisputable
• Regardless of emphasis applied, struggle with fully
implementing practice and achieve intended benefits
• Wide-spread lack of real success stories
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PBA Defined
• Federal Acquisition Regulation (FAR) defines as “an acquisition
structured around the results to be achieved as opposed to the
manner in which the work is to be performed”
• Two required elements
– Work stated in terms of outcomes or results rather than method of
performance
– Measurable performance standards and method of assessment
• Recommended third element is use of performance incentives
• Elements comprise “litmus” test
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Examples of Successful PBAs
• DOE Rocky Flats Cleanup
– Completed year ahead of schedule and under budget
• NOAA Advanced Weather Interactive Processing
System (AWIPS)
– Align contractors performance consistent with NWS mission
• FBI National Data Exchange (N-DEx)
– Competition of innovative ideas
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Analysis
• Examined what works well and what doesn’t with Seven Steps
• Used data from:
– “Front-line” government forum from 2006
– Practicitioner feedback
– Retrospect's from each Step
– Agency/client interviews from major engagements
– Acquisition Advisory Panel recommendations
• “Deep dive" into topical areas of concern such as:
– Development of effective performance objectives/measures
– Use of incentives
– Follow through in contract administration
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Analysis Results – Successful Elements
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Project plan/team charter
Stakeholder buy-in
Senior leadership sponsorship and involvement
Comprehensive upfront training
Statement of Objectives
Market research/industry one-on-ones
Offeror due diligence
Focused selection criteria
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Analysis Results – Impediments to Success
• Lack of stakeholder socialization – causes failure with pre-award
IPT and post award management
• IPTs reflect parent organization’s toxic environment - serves as
impediment instead of facilitator
• Lack of strong champion; process discipline
• Objectives not formulated at high level and with strategic linkage
• Objectives for a multi-customer team not correlated into a
comprehensive SOO or PWS
• “Risk averse” culture gravitates towards use of prescriptive
requirements
• No just in time training – knowledge at the point of execution
• Lack of meaningful/effective performance objectives/measures
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Impediments con’t
• Lack of disciplined incentive/disincentive application
process
• Confusion over what constitutes an incentive
• Wrong things incentivized
• “Weather helm” effect – revert to “business as usual”
path after award; no PBA administration plan
• Post-award - measures ignored, not agreed upon
prior to award, or changed to less effective ones
• Lack of performance monitoring and governance
infrastructures
• Lack of post-award implementation planning and
socialization
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Next Level: Major Features
• Themes of Successful Acquisition Results
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Accountability
Transparency
Competition
Performance Management
• Three Phases
– Socialization
– Establishing the contractor performance relationship
– Managing the contract for results
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Draws upon Success of Seven Steps
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Establish the team
Decide what problem needs solving
Examine private-sector and public-sector solutions
Develop a PWS or SOO
Decide how to measure and manage performance
Select the right contractor
Management performance
http://acquisition.gov/SevenSteps
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New Model
Three Phases
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Phase 1 – Socialization
Identify accountable parties, establish vision, and prepare for
acquisition success
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Define project success and needed outcomes
Identify champion and other responsible parties
Ensure senior management understands and supports vision
Organize IPT for accountability including empowerment and incentivizes
Achieve clarity and consensus on objectives
Ensure a strategic linkage of objectives with agency/program mission
Recognize the culture and identify barriers
Get agency “ready” through “socialization”
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Establish mutually supportive working relationships
Stakeholder involvement
Communication strategy
Facilitation support
Training/education
Transformation
Project plan/charter
IPT Management
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Phase 2 – Establish Contractor Performance Relationship
Leverage competition for solutions and sign structured agreement
with selected source to deliver outcomes
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Maximize marketplace innovation to obtain most advantageous
competing solutions
Apply disciplined methodology so that right performance objectives,
performance standards and metrics are structured (Government
prepares metrics/QASP in RFX and offeror can either accept or
propose alternatives that are negotiated before award)
Define processes to monitor and assess performance
Negotiate optimum business deal to achieve program success along
with incentives linked with outcomes
Finalize agreement so performance, schedule and cost objectives are
mutually understood and establish a teaming approach
(agency/contractor partnership) for success
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Phase 3 – Manage Contract for Results
Post-award Performance management
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Implement clear strategies for governance, risk management, and
communications
Develop and implement contract administration plan, processes, and
procedures
Establish a framework and platform to monitor performance and
continuously identify areas for improvement (include contractor in this
process)
Ensure proper infrastructure for success is in place
Develop managed relationship with contractor through strong
collaborative interactions, mutual trust, and active leadership
involvement
Establish sustainable and accountable partnership
Develop team agreement between government and contractor –
protocol on how to work together
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Acquisition Themes Integral and Dynamic
Accountability, Transparency, Competition and
Performance woven throughout
• Integral part of each phase
• Themes take on different perspective in each
phase
• Role of each varies and dynamic impact
• Phases and themes overlap Seven Steps
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Using New Model – First Steps
• Prepare the agency for socialization
– Ensure management is supportive and
champion exists
– Perform environmental audit to assess
readiness and identify “toxic” elements and
“get well” plan
– Train team on PBA
– Communicate constantly
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Using New Model – First Steps con’t
• Prepare individuals involved in source
selection and negotiations to think/act
differently
– Develop acquisition specific evaluation
process
– Prepare to bargain with each offeror on
each aspect of offer to ensure agency gets
what it wants and needs
– True performance relational type
agreement is goal
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Using New Model – First Steps con’t
• Prepare for post-award management
– Often involves cultural shift
– Use of different tools, techniques, and disciplined approach
• Team charter
• Team agreement with contractor
• QASP
• Governance plan
• Communications plan
• Risk management plan
• Performance plan
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Taking PBA to Next Level
Ready to Try it?
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